A California appeals court upholds a trial court's denial of a conservator's petition to establish a first-party special needs for a 66-year-old woman because under federal law (d)(4)(A) trusts cannot be created for the benefit of people who are age 65 years and older. The court declines to rule on the conservator’s proposed creation of a pooled trust instead. Conservatorship of the Person and Estate of Horton (Cal. Ct. App., 2d, No. B253487, Jan. 15, 2015).
Elaine Abbott is a professional conservator who manages Carla Horton's estate. When Ms. Horton was 66 years old, Ms. Abbott petitioned the probate court to establish a (d)(4)(A) trust for Ms. Horton's benefit. Ms. Abbott also requested a bond and authority to purchase and sell mutual funds through the trust. The probate court denied the petition because 42 U.S.C. § 1396p(d)(4)(A), the federal statute authorizing the creation of (d)(4)(A) trusts, specifically states that the trust must contain the assets of a person under the age of 65 who is disabled.
Ms. Abbott appealed the probate court's decision. After the appeals court asked Ms. Abbott why her appeal was not moot due to Ms. Horton's age, Ms. Abbott submitted a brief proposing that the court create a pooled trust, also known as a (d)(4)(C) trust, for Ms. Horton because pooled trusts can be funded by beneficiaries of any age. Ms. Horton explained to the appeals court that "her new proposal was not raised below 'because the concept of a Pooled Special Needs Trust was not then known by Petitioner as a viable alternative'" to a (d)(4)(A) trust.
The California Court of Appeal, 2nd District, denies Ms. Abbott's appeal and requires her to pay for all costs and legal fees directly because the appeal did not benefit Ms. Horton. The court declines "appellant’s invitation to rule on an issue that was never presented to the Probate Court, never adjudicated, and is inadequately briefed. The proposed trust presented to the Probate Court does not remotely resemble the newly submitted exemplar for a ’Z pooled trust.’”
To read the full text of this decision, go to: https://www.courts.ca.gov/opinions/nonpub/B253487.PDF
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